I've heard some stories that people needed to format their HD first, and some needed to defrag first.....
This is from a different ng, but the user had the same issue:
Just wanted to say thank you for the support provided. I did get mandrake 9.2 installed.
I didn't have a cd burner so I used the hd.img to install. I found it was necessary to get the hd.img from the same place you download from. ISO buster was handy when downloading from the ISO. Downloading a separate hd.img file didn't work so well.
I had trouble with the hd install until I realized the install kept crapping out at the same place. That place was where it started looking for files located on *disk2* (a separate iso file). I found the best way was to combine the 3 disks in a single directory. once I did that the install from HD went fine. "